Rubber Set for Best Weekly Gain in 3 Years on Growth
January 20, 2012, 12:46 AM ESTBy Aya Takada
(Corrects Thai baht conversion in fifth paragraph.)
Jan. 20 (Bloomberg) -- Rubber climbed, heading for the best weekly gain in three years, amid optimism about economic growth after U.S. jobless claims dropped to the lowest level in almost four years and Spanish and French borrowing costs fell.
June-delivery rubber climbed as much as 2.6 percent to 313 yen a kilogram ($4,060 a metric ton), the highest level since Oct. 31, before trading at 312.7 yen on the Tokyo Commodity Exchange at 12:20 p.m. The most-active contract has gained 13 percent this week, the most since the week ended Dec. 19, 2008.
Asian stocks extended a global rally after a report showed U.S. initial jobless claims dropped by 50,000 to 352,000. Spain and France sold bonds at lower yields, boosting optimism the region’s sovereign-debt crisis is being contained.
“Concerns about the European crisis are easing, spurring investor purchases of riskier assets,” Takaki Shigemoto, an analyst at research company JSC Corp. in Tokyo, said today by phone. “Rubber also drew support from expectations for China’s monetary easing and Thailand’s price-support plan.”
Thailand’s government plans to spend 17 billion baht ($539 million) to buy rubber at above-market rates to boost the domestic price to 120 baht a kilogram, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said Jan. 17. Chinese bank lending in the first quarter may rise from a year earlier, the Shanghai Securities News reported today.
Thai rubber prices slumped 29 percent last year as the European crisis deepened concerns the global recovery may stall, weakening demand for the commodity used in tires. “The appropriate and sustainable level” for rubber is at 120 baht a kilogram, Agriculture Minister Theera Wongsamut said this week.
May-delivery rubber gained 2.6 percent to 27,650 yuan ($4,378) a ton on the Shanghai Futures Exchange. The Thai cash price jumped 2.9 percent to 118.05 baht a kilogram yesterday, according to the Rubber Research Institute of Thailand.
--Editors: Jarrett Banks, Richard Dobson
To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
